Out of Control Policy Blog

Is bureaucracy a disaster?

As the post Katrina clean up progresses and the finger pointing intensifies, it's likely that most of the back-and-forth will be Dems vs. Reps.

The Feds should have done more!

The local govt should have done more!

But there's another position. Maybe individual governments aren't so much the problem. Maybe government itself just doesn't have the right incentives to prepare for and respond to disasters.

Jesse Walker points to a couple links that explode into a bunch of useful resources.

First, Lew Rockwell:

    It was the failure of the public infrastructure and the response to it that brought down civilization.

    The levees that failed and caused New Orleans to be flooded, bringing a humanitarian crisis not seen in our country in modern times, were owned and maintained by the Army Corps of Engineers. The original levees surrounding this city below sea level were erected in 1718, and have been variously expanded since.

    But who knew that a direct hit by a hurricane would cause them to break? Many people, it turns out. Ivor van Heerden of Louisiana State University, reports Newsday, "who has developed flooding models for New Orleans, was among those issuing dire predictions as Katrina approached, warnings that turned out to be grimly accurate ..."

    Only the public sector can preside over a situation this precarious and display utter and complete inertia. What do these people have to lose? They are not real owners. There are no profits or losses at stake. They do not have to answer to risk-obsessed insurance companies who insist on premiums matching even the most remote contingencies.

Whole article here.

Although he doesn't seem to hold this position, Tyler Cowen offers some arguments in favor of privatizing levees.

Here are parts of three of them:

    1.We rely too much on unreliable levees, and privatization/non-subsidization would reveal their true social costs and induce people to move elsewhere.

    4. A private levee authority would invest in water safety out of fear of being sued.

    5. A private levee authority would be forced by its insurance company to build good protection and also hold huge capital reserves. Their cost of capital and costs of production would remain lower than the government's.

Here's an interesting look at the response to the Chicago Fire:

    In 1871, one-third of the city of Chicago–including the entire downtown and surrounding neighborhoods–burned to the ground. While it may seem startling to Americans today, the government did almost nothing in response. But within two years, Chicago's burned district had been almost completely rebuilt through private initiative.

Ted Balaker is Producer


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